Domestic two-wheeler market in decline mode: Bajaj Auto

Bajaj Auto reported total sales figures of 3.44 lakh units in August. Rajiv Bajaj, MD of the company said they are satisfied to hold sales volumes month-on-month. However, he expects the September quarter to be tough for all two-wheeler companies and he believes the domestic motorcycle market is in decline mode. In August, Bajaj Auto reported motorcycle sales of 3.05 lakh against 3.08 lakh units last month. But, the new Discover 125ST is seeing a good response from the market and reached sales figures of 25000 in August, said Bajaj.

Moreover, normalcy has been restored in the export markets of Sri Lanka and Egypt, informed Bajaj. Three-wheeler sales figures in Sri Lanka has considerably picked up from 3000 units earlier to 7500 units, he added. Besides, the company expects its inventory level to be at 2.20 lakh units and at present, it is higher than expected, Bajaj informed.

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Here is the edited transcript of the interview on CNBC-TV18.

Q: The number is the same as July. You were expecting a bit of a pick up this month? Why has that not happened?

A: Quite frankly I have said that this will be a difficult quarter for everyone including us. Primarily, it compares poorly with last year because the festive season is a month later this year and from this point of view, I am quite happy that we are able to hold on to our volumes.

If you break up that 3,45,000 you will see that motorcycles are about a percentage point lower than in July. So they are almost the same. Whereas three wheelers have actually picked up by 5000 units over July to cross 40,000 units after a gap of 2-3 months.This was primarily because we are again seeing normalcy in three wheeler markets and export markets such as Sri Lanka and Egypt.

Q: So are those problems fully behind you or the numbers even at 40,000 are still not at fully normal kind of working?

A: If they were fully normal, I would expect them to be another 3000 units higher. Problems have not fully normalized and they are unlikely to be because in Sri Lanka which is our largest three-wheeler export market, we were doing 10,000 plus three-wheelers a month.

Due to tariff changes that fell to a low of about 3000. It is back to about 7500 basis the price corrections that our distributor and Bajaj made. But, since we are not able to achieve the free tariff prices, I don’t think we can get back to exactly the 10,000 number that we were at.

Q: Your motorcycle numbers for the current month would be what 3.15 lakh?

A: The total motorcycle sales are about 3.05 lakh. If you like I can give you a quick breakup. It is about 65,000 for Boxer and 45,000 for Platina. We have done very well with Discover,1,25,000 units owing primarily to the outstanding response we have received for our new Discover 125 ST. We are targeted to produce and sell 20,000 units in August. We have actually managed to do almost 25,000 and we had a wonderful response from the market for that product.

The Pulsar platform is at 70,000 units which is also a nice number. Given the general sentiment in the market for more expensive products at this time, that owes itself to a very good response to the New Pulsar 200NS. We targeted 8,000 units last month. We have done 7,200. So a little short of the target but, nevertheless not a bad number for a bike that is selling at about a Rs 100,000.